What You Need to Know About Long-Term Care Insurance

Long-term care is needed when someone suffers an illness, injury, or chronic condition that makes it difficult to perform basic activities of daily living like preparing meals, eating, bathing, or doing chores. Unfortunately, many seniors underestimate the cost of long-term care or assume it will be covered by Medicare or health insurance. It’s estimated that over half of 65-year-olds today will need long-term care during their life at an average cost of $138,000.

Paying for long-term care can drain your savings, but long-term care insurance offers a solution. Long-term care (LTC) insurance is an important form of insurance that covers many types of long-term care not covered by Medicaid, Medicare, and health insurance. Here’s how it works and what you need to qualify.

What Is Long-Term Care Insurance?

Many forms of long-term care are not covered by Medicare, Medicaid, and health insurance. An employer-based insurance plan never pays for daily, extended care. While Medicare can pay for limited in-home care or a short nursing home stay, it only does so under specific conditions. It won’t pay for personal care, which is non-medical in-home care like help with dressing and bathing.

Long-term care insurance is an insurance policy that covers a wide variety of care to give you peace of mind and coverage when you need it. Along with covering medical and nursing care, LTC insurance can also cover personal care. A long-term care policy can cover services received in a nursing home, an assisted living facility, or your home.

Qualifying for Long-Term Care Coverage

Many companies offer LTC insurance. While every company has their own guidelines, you must typically be in reasonably good health and able to care for yourself when you buy a long-term care policy. Most companies have an age limit and do not issue policies to individuals over the age of 84, but this limit only applies to your age when you apply for coverage. Nearly all LTC policies are guaranteed renewable and cannot be canceled as long as you pay the premiums on time and do not lie on the application.

While some people never need long-term care, many need care at least some point in their life. On average, a senior needs at least two years of long-term care at some point, but many seniors require care for even longer. A nursing home can easily cost more than $50,000 per year, but home care can also add up. Non-medical home care can cost $12,000 per year. An LTC policy can cover these expenses to pay for the care you need.

Paying for Home Care with LTC Insurance

When it comes to paying for home care with a long-term care policy, you will likely need to meet specific guidelines. Most policies require that you need help with Activities of Daily Living (ADLs) or suffer from cognitive impairment. The typical long-term care policy includes the following ADLs:

  • Feeding
  • Grooming
  • Ambulation or help transferring or moving
  • Bathing
  • Toileting

If you are concerned about the cost of home care and other forms of long-term care, an LTC insurance policy can help cover these expenses to protect your savings and the financial health of your loved ones.